Only if fairy tales were real and genies could make stones turn into gold, would there be any need for savings? No, right? So in the real world if one is to enhance one's money, he must save. And here the rule goes – the sooner the better! Create a savings account early in life to get the highest benefits. We all know that savings and investments are the building blocks to a person's financial security and fund management.
Now, savings accounts can be of different types and each of these will give you some amount of return, depending on how much you save and the bank you choose. The fastest way to see your money grow in leaps and bounds is to have a money market savings account.
This account is as simple as a regular savings account. The only differences are:
- The minimum opening balance requirement is more.
- These allow limited (three to six) monthly withdrawals, unlike ordinary savings accounts.
- These pay much higher interests.
You begin with more, you withdrawal less and you get high interest – naturally, your money grows faster than in the usual savings accounts.
These accounts center on the money market. The latter is a financial market in which money is borrowed and lent on a short-term basis, thereby giving some liquidity in the global fiscal system. In money market accounts, the bank benefits by putting a limit to your monthly withdrawals and you benefit from the high interest the bank pays.
However, it should be noted that the limited transactions have a fire in this that if the account holder urgently needs to withdraw some money beyond the maximum number of withdrawals allowed, he / she can do that with a charge of approximately $ 5 to $ 10 for each withdrawal.
If you deposit more, your actual fund will multiply manifold for the simple reason that the interest in these accounts is compounded daily. Although the rate of interest varies from bank to bank, all money market accounts generally work on compound interests. For instance, if you start your account with $ 100 and your interest is $ 1, your principal on Day 2 becomes $ 101 and interest is charged on this amount, not on the initial $ 100. So every time you add to the account, you are actually enhancing your interest amount and getting back more. This is one reason why many people consider these to be the best savings accounts .
Once you have this account, you will get a register to maintain your transaction details like the opening balance, withdrawals, deposits, etc. This will help you tally your records with those in the monthly bank account statement.
All money in these accounts is insured by an independent agency of the federal government called Federal Deposit Insurance Corporation (FDIC). So your money is always in safe hands when you bank on the money market.
Remember, it does not always take genies to do magic; you can be one yourself. So, good luck!